David Trahan, Republican state representative from Waldoboro, was at a local radio station a couple of weeks ago explaining, as he had been for months, that Gov. John Baldacci’s administration was collecting a lot more tax revenues than almost anyone knew. A caller to the station told Trahan his numbers were way off and the administration had a stellar record on taxes. The caller, being the governor himself, may have been biased, but the exchange highlighted one of the great missed opportun-ities in Maine politics.
Trahan’s argument is complicated. In brief, he uses various budget figures from the Legislature’s nonpartisan Office of Fiscal and Program Review to conclude the Baldacci administration has cumulatively raised taxes not by the relatively modest $239 million it claims but by $900 million, and it has done this in a way that does not pass auditing standards and at the same time denies municipalities their full share.
The $900 million figure is subject to debate – $298 million of it, for instance, is a Medicaid program that raises tax money from hospitals, draws down federal money at nearly 2-for-1, then redistributes nearly all the taxes to hospitals. Whether you think this is good policy or not, the net increase from the hospitals is something considerably lower than the $298 million.
Another $124 million of Trahan’s total is an indexed gasoline tax that was set under the King administration. If that indexing counts, says Rebecca Wyke, Baldacci’s budget commissioner, then so should the indexed income-tax reductions passed during the last administration, cutting taxes during the current one by $77 million, and so should all reauthorized tax exemptions, worth $1 billion a year.
Another $122 million of the $900 million, by the way, is the cigarette tax, which certainly is an increase but one with popular support because the higher price per pack keeps a bunch of kids from getting lung cancer.
If you keep picking at the $900 million figure – Dirigo’s offset payment is in there, which is set based on health care savings, and so are slot machine taxes, which the governor vigorously opposed – you still end up with a real difference. But it’s a difference that as Grant Pennoyer, head of the Office of Fiscal and Program Review, and Ryan Low, state budget officer, found as they went through the increases line by line this week, amounts to less a conflict than an accounting debate.
What about the method that won’t pass auditing standards? The administration and Legislature moved the payback for the business equipment and tax breaks for homeowners with high property taxes from the expenditures line in the budget to a revenue-offset line because those rebates were being counted as part of the state tax burden. The change has the effect of making total revenues look smaller. That sounds like a deception. “It’s a very open deception, if you call it a deception,” Pennoyer said. “This has been done all out in the open.”
But what about stiffing the municipalities? Trahan argues that because towns get a percent based on the expenditure side of the budget, they lost out when those rebate programs were moved and have so far lost $11 million. Agreed, says the administration, but revenue sharing with towns has increased anyway, up more than $25 million during the same time the $11 million was subtracted.
That’s a lot of back and forth, but that’s the point. As Trahan and I were ending a meeting the other day, he said it was less important to him whether anyone agreed specifically with his numbers than that they saw the lack of means for legislators to debate something as massive as what he was describing.
This is the great loss to Maine: Two political parties that aren’t nearly as far apart as they pretend and with legislators that are unusually polite to each other lose considerable time disagreeing over something as basic as how a budget operates. You will find these time-losing disagreements throughout legislative sessions, a cost to Maine more severe than some of its tax increases.
The accounting resources for lawmakers might be strengthened, though they have been helped by the Legislature’s new oversight agency, the Office of Program Evaluation and Government Accountability. But what Trahan is describing is something more fundamental: a way for opposing parties, when the occasion demands, to be something beyond opposing parties. That is not a line in the budget or a new agency.
It depends, instead, on trust and on political leaders willing to put respect for their roles ahead of the interests of the next election. They must make it easy for legislators to probe, doubt, examine and re-examine the way Maine government conducts business, and legislators must be willing to accept that where there is smoke, there is sometimes fire and sometimes just a guy grumbling about the new tax on his Camels.
The forum for sorting this out is not an impromptu debate on a call-in radio show.
Todd Benoit is the editorial page editor of the Bangor Daily News.
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